Acrylonitrile industry will usher in the peak of capacity expansion

After experiencing the soaring price at the end of last year, the domestic acrylonitrile market has fluctuated slightly since the beginning of 2021. Before the deadline, the price of acrylonitrile in East China closed at 12,200 CNY/ton, an increase of 0.4% during the year, basically the same as the price at the beginning of the year. Recently, the acrylonitrile plant has not been overhauled and the downstream demand is relatively stable. In the long term, with the gradual increase in supply, the overall pressure of the acrylonitrile industry is greater.

In recent years, domestic acrylonitrile production capacity has increased steadily. According to statistics, in June 2020, the 260,000 tons/year acrylonitrile plant of Zhejiang Petrochemical was put into operation, bringing the total domestic production capacity of acrylonitrile to about 2.6 million tons/year. Entering 2021, the acrylonitrile industry will enter the peak of new equipment commissioning. Kroul Phase II 130,000 tons/year, Serban Phase III 260,000 tons/year, Zhejiang Petrochemical Phase II 260,000 tons/year, etc. are planned to be put into operation within the year , Then the market supply will be very sufficient.

With the continuous growth of domestic production capacity, the trade flow of acrylonitrile has undergone certain changes. According to customs data, the total domestic imports of acrylonitrile in 2020 will be 306,600 tons, a decrease of 0.6% year-on-year. The overall performance is still relatively stable. Since most of the acrylonitrile importers are Zhenjiang Chimei Plastics, Taihua Plastics and other plastic companies in South Korea and Taiwan, they are equipped with corresponding raw material equipment locally, so this type of import is mainly based on the long-term contract, and the change is expected to be small. It is worth noting that the export volume of acrylonitrile in 2020 will further increase. According to statistics, the total export volume during the year was 72,800 tons, an increase of 69.8% year-on-year. The export destinations are mainly concentrated in South Korea, India, Thailand and Turkey. In just a few years, the export volume of acrylonitrile industry has been greatly increased. It is reported that in 2020, the 280,000 tons/year acrylonitrile plant of Ineos in Hill Sands, UK, will be permanently shut down, coupled with the increase of domestic production capacity, promoting exports has become an inevitable development trend of the domestic acrylonitrile industry.

There are also two points in the development of the downstream industry of acrylonitrile. Acrylonitrile is mainly used to produce products such as ABS, acrylic and acrylamide. In the future, ABS is still the main growth point supporting the demand for acrylonitrile. In 2021, Guangxi Changke 150,000 tons/year, Taihua Xingye (Ningbo) 250,000 tons/year, Zhangzhou Chimei 450,000 tons/year, etc. will be put into production with a total of 1.4 million tons/year ABS production capacity. Another major downstream acrylic fiber production capacity has not increased in recent years, and the industry lacks high value-added and differentiated products, which is greatly affected by the impact of polyester and viscose products. In recent years, other downstream areas of acrylonitrile have gradually gained attention. In terms of carbon fiber, in January this year, Shanghai Petrochemical started construction of 12,000 tons/year 48K large tow carbon fiber. Jinggong Technology completed the localization of the first thousand-ton carbon fiber production line, indicating that the domestic carbon fiber industry is gradually mature and is expected to become a new downstream acrylonitrile Dark horse. At the same time, the outbreak of the epidemic in 2020 has caused a surge in the demand for medical gloves, and the nitrile latex industry has also been greatly developed. However, due to the small overall production capacity, the overall demand for acrylonitrile has not contributed much.

In summary, the recent international crude oil trend is strong, and the acrylonitrile raw material is positive, which drives the short-term upward trend of acrylonitrile. In the long run, the domestic production capacity of acrylonitrile will see substantial growth, and the future demand from ABS, carbon fiber and nitrile latex is expected to increase.